Strategic Staffing- A New Dimension in A, B, C Staffing*

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Strategic Staffing-A New Dimension in A, B, C
Staffing
From A Players or Positions by Huselid, Beatty
and Becker HRR Dec. 2005
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Is Competition An Issue?

• Then differentiation is critical.
• Too many fail to differentiate their workforce.
• Assess your workforce differentiation below

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Check all that apply

• ___Position descriptions are based on history
  or industry standards, not strategic
  contribution.
• ___Most positions are paid at the market
  midpoint.
• ___Recruitment and retention of staff involve
  the same effort and budget for all positions.

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• ___The selection process is the same for all
  positions.
• ___Little developmental rotation occurs.
• ___Few Cs are eliminated or outsourced.
• ___Performance evaluations are done rarely or at
  salary review.
• ___Candor is low in performance reviews.

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• ___Many or most staff are rated the same.
• ___A forced distribution of ratings is used.
• ___Those in the middle are rated okay or
  average or satisfactory and receive pay raises.
• ___Poor performers dont improve yet stay.
• ___Top management is not rigorously evaluated.

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Check Any?

• If so, you may not have a differentiated
  workforce.
• You treat everyone equally and fairly..
• Just like the government.
• You loose a major competitive advantage
• Lets take a look at what you can do.

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Staffing Means

• Selecting the right people to fill a position
• Knowledge, Skills and Attitudes to fit the job

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ABC Staffing Means

• Jack Welchs employee letter 1990s
• Rate all managers A or B or C
• Expect something like this
• 20 As
• 70 Bs
• 10 Cs
• Regularly fire Cs,
• Help Bs become As

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Challenges With This Approach

• Most leaders will not fire Cs
• Most businesses cant afford all As
• Focusing on A people puts the horse before the
  cart
• Focusing on A people is tactical not strategic

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A Strategic Approach to ABC

• Identify the A positions
• Staff A positions with A players
• Staff B position with B Players
• Eliminate C players
• Eliminate or reduce C positions

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Whats An A Position?

• A disproportionate ability to contribute to
  strategy and success. For example
• Making your accounting twice as strong would have
  little impact of revenue, costs or profit.
• Same for maintenance or cleaning.
• Suppose sales was twice as strong?
• A wide variability in employees performance in
  this position.
• This means you can improve the performance.

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To begin What is your strategy?

• What simultaneously distinguishes you and drives
  performance?
• Customer Service drives Nordstrom and Costco.
• For Nordstrom personalized service
• For Costco low prices and availability

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What Is Yours?
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Variability In Performance

• Huge upside in raising average performance.

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For Example

• Average Sales per month varies from 30 to 60.
  With the average at 40/month.
• If each sales is worth 1,000 a year.
• A 30/mo sells 360/yr or 360,000/yr
• A 60/mo sells 720/yr or 720,000/yr
• This is a 360,000 varaibility.
• The cost to service the extra 360 sales?

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Additional Impacts

• Sales staff in lower third are likely to create
  negative impressions in the market.
• Sales staff in the top third are likely to create
  positive impressions in the market,
• significantly more referrals sales,
• significantly more revenue per sale.

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A Positions

• Defining Characteristics Direct strategic impact
  and high variability. Not related to hierarchy or
  scarcity.
• Scope of Authority Autonomous decision making
• Compensation by Performance
• Impact on Value Drives revenue up or costs down
• Impact of mistakes Very high
• Impact of wrong fit Very high

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B Positions

• Defining Characteristics Indirect strategic
  impact by supporting As minimizes downside by
  providing a foundation. OR has strategic impact
  but little variability (e.g. airplane pilots).
• Scope of Authority Follows procedures
  guidelines
• Compensation by Job level
• Impact on Value Supports value creating
  positions
• Impact of mistakes Very high
• Impact of wrong fit Slight

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C Positions

• Defining Characteristics May be required for the
  business to function, but has little strategic
  impact.
• Scope of Authority Little discretion
• Compensation by Market price
• Impact on Value Little positive economic impact
• Impact of mistakes Usually, very little
• Impact of wrong fit Slight

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Managing A Positions

• They require disproportionate investments
• Some invest equally in top and bottom dont!
• Regularly evaluated in detail
• Actively and robustly developed
• Generously compensated. Annual increases up to 3x
  a strong performer
• Strong pipeline management to find, select and
  develop bench and successors.

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A Strategic Approach to ABC

• Identify the A positions
• Get Cs out of A positions now
• Replace them with A players
• Help Bs in A positions become As
• Staff B position with B Players
• B positions rarely add value, but are necessary
  to support A positions.
• Eliminate C players
• Eliminate or reduce C positions
• Many REX Roundtable clubs have eliminated 50,000
  to 100,000 a year in C positions.